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This objective can be accomplished in other ways (like a partnership), but the corporate form of organization is arguably one of the better vehicles.
This leads one to wonder why go to all the trouble of incorporating?
The reasons for incorporating can vary, but there are certain unique advantages to this form of organization that have led to its popularity.
One advantage of the corporate form of organization is that it permits otherwise unaffiliated persons to join together in mutual ownership of a business entity.
After reviewing the articles of incorporation, the Secretary of State will issue a charter (or certificate of incorporation) authorizing the corporate entity.
The persons who initiated the filing (the “incorporators”) will then collect the shareholders’ initial investment in exchange for the “stock” of the corporation (the is the financial instrument evidencing a person’s ownership interest).
Once the initial stock is issued, a shareholders’ meeting will be convened to adopt bylaws and elect a board of directors.
These directors appoint the corporate officers who are responsible for commencing the operations of the business.
A corporation is a legal entity having existence separate and distinct from its owners (i.e., stockholders).
Corporations are artificial beings existing only in contemplation of law.
A corporation is typically created when one or more individuals file “articles of incorporation” with a Secretary of State in a particular jurisdiction.
The articles of incorporation generally specify a number of important features about the purpose of the entity and how governance will be structured.